Bill Text: CA AB510 | 2009-2010 | Regular Session | Chaptered
Bill Title: Net energy metering.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2010-02-26 - Chaptered by Secretary of State - Chapter 6, Statutes of 2010. [AB510 Detail]
Download: California-2009-AB510-Chaptered.html
BILL NUMBER: AB 510 CHAPTERED
BILL TEXT
CHAPTER 6
FILED WITH SECRETARY OF STATE FEBRUARY 26, 2010
APPROVED BY GOVERNOR FEBRUARY 26, 2010
PASSED THE SENATE FEBRUARY 11, 2010
PASSED THE ASSEMBLY FEBRUARY 18, 2010
AMENDED IN SENATE JANUARY 26, 2010
AMENDED IN ASSEMBLY APRIL 2, 2009
INTRODUCED BY Assembly Member Skinner
(Coauthor: Senator Kehoe)
FEBRUARY 24, 2009
An act to amend Section 2827 of the Public Utilities Code,
relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 510, Skinner. Net energy metering.
Existing law relative to private energy producers requires every
electric utility, as defined, to make available to an eligible
customer-generator, as defined, a standard contract or tariff for net
energy metering on a first-come-first-served basis until the time
that the total rated generating capacity used by eligible
customer-generators exceeds 2.5% of the electric utility's aggregate
customer peak demand.
This bill instead would require that the standard contract or
tariff for net energy metering be offered on a
first-come-first-served basis until the time that the total rated
generating capacity used by eligible customer-generators exceeds 5%
of the electric utility's aggregate customer peak demand. The bill
would require an electrical corporation to include a provision in the
net energy metering contract or tariff requiring that any customer
with an existing electrical generating facility and meter who enters
into a new net energy metering contract to provide an inspection
report to the electrical corporation, unless the electrical
generating facility and meter have been installed or inspected within
the previous 3 years.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 2827 of the Public Utilities Code is amended to
read:
2827. (a) The Legislature finds and declares that a program to
provide net energy metering combined with net surplus compensation,
co-energy metering, and wind energy co-metering for eligible
customer-generators is one way to encourage substantial private
investment in renewable energy resources, stimulate in-state economic
growth, reduce demand for electricity during peak consumption
periods, help stabilize California's energy supply infrastructure,
enhance the continued diversification of California's energy resource
mix, reduce interconnection and administrative costs for electricity
suppliers, and encourage conservation and efficiency.
(b) As used in this section, the following terms have the
following meanings:
(1) "Co-energy metering" means a program that is the same in all
other respects as a net energy metering program, except that the
local publicly owned electric utility has elected to apply a
generation-to-generation energy and time-of-use credit formula as
provided in subdivision (i).
(2) "Electrical cooperative" means an electrical cooperative as
defined in Section 2776.
(3) "Electric utility" means an electrical corporation, a local
publicly owned electric utility, or an electrical cooperative, or any
other entity, except an electric service provider, that offers
electrical service. This section shall not apply to a local publicly
owned electric utility that serves more than 750,000 customers and
that also conveys water to its customers.
(4) "Eligible customer-generator" means a residential customer,
small commercial customer as defined in subdivision (h) of Section
331, or commercial, industrial, or agricultural customer of an
electric utility, who uses a solar or a wind turbine electrical
generating facility, or a hybrid system of both, with a capacity of
not more than one megawatt that is located on the customer's owned,
leased, or rented premises, and is interconnected and operates in
parallel with the electric grid, and is intended primarily to offset
part or all of the customer's own electrical requirements.
(5) "Net energy metering" means measuring the difference between
the electricity supplied through the electric grid and the
electricity generated by an eligible customer-generator and fed back
to the electric grid over a 12-month period as described in
subdivisions (c) and (h).
(6) "Net surplus customer-generator" means an eligible
customer-generator that generates more electricity during a 12-month
period than is supplied by the electric utility to the eligible
customer-generator during the same 12-month period.
(7) "Net surplus electricity" means all electricity generated by
an eligible customer-generator measured in kilowatthours over a
12-month period that exceeds the amount of electricity consumed by
that eligible customer-generator.
(8) "Net surplus electricity compensation" means a per
kilowatthour rate offered by the electric utility to the net surplus
customer-generator for net surplus electricity that is set by the
ratemaking authority pursuant to subdivision (h).
(9) "Ratemaking authority" means, for an electrical corporation or
electrical cooperative, the commission, and for a local publicly
owned electric utility, the local elected body responsible for
setting the rates of the local publicly owned utility.
(10) "Wind energy co-metering" means any wind energy project
greater than 50 kilowatts, but not exceeding one megawatt, where the
difference between the electricity supplied through the electric grid
and the electricity generated by an eligible customer-generator and
fed back to the electric grid over a 12-month period is as described
in subdivision (h). Wind energy co-metering shall be accomplished
pursuant to Section 2827.8.
(c) (1) Every electric utility shall develop a standard contract
or tariff providing for net energy metering, and shall make this
standard contract or tariff available to eligible
customer-generators, upon request, on a first-come-first-served basis
until the time that the total rated generating capacity used by
eligible customer-generators exceeds 5 percent of the electric
utility's aggregate customer peak demand. Net energy metering shall
be accomplished using a single meter capable of registering the flow
of electricity in two directions. An additional meter or meters to
monitor the flow of electricity in each direction may be installed
with the consent of the eligible customer-generator, at the expense
of the electric utility, and the additional metering shall be used
only to provide the information necessary to accurately bill or
credit the eligible customer-generator pursuant to subdivision (h),
or to collect solar or wind electric generating system performance
information for research purposes. If the existing electrical meter
of an eligible customer-generator is not capable of measuring the
flow of electricity in two directions, the eligible
customer-generator shall be responsible for all expenses involved in
purchasing and installing a meter that is able to measure electricity
flow in two directions. If an additional meter or meters are
installed, the net energy metering calculation shall yield a result
identical to that of a single meter. An eligible customer-generator
that is receiving service other than through the standard contract or
tariff may elect to receive service through the standard contract or
tariff until the electric utility reaches the generation limit set
forth in this paragraph. Once the generation limit is reached, only
eligible customer-generators that had previously elected to receive
service pursuant to the standard contract or tariff have a right to
continue to receive service pursuant to the standard contract or
tariff. Eligibility for net energy metering does not limit an
eligible customer-generator's eligibility for any other rebate,
incentive, or credit provided by the electric utility, or pursuant to
any governmental program, including rebates and incentives provided
pursuant to the California Solar Initiative.
(2) An electrical corporation shall include a provision in the net
energy metering contract or tariff requiring that any customer with
an existing electrical generating facility and meter who enters into
a new net energy metering contract shall provide an inspection report
to the electrical corporation, unless the electrical generating
facility and meter have been installed or inspected within the
previous three years. The inspection report shall be prepared by a
California licensed contractor who is not the owner or operator of
the facility and meter. A California licensed electrician shall
perform the inspection of the electrical portion of the facility and
meter.
(3) (A) On an annual basis, beginning in 2003, every electric
utility shall make available to the ratemaking authority information
on the total rated generating capacity used by eligible
customer-generators that are customers of that provider in the
provider's service area and the net surplus electricity purchased by
the electric utility pursuant to this section.
(B) An electric service provider operating pursuant to Section 394
shall make available to the ratemaking authority the information
required by this paragraph for each eligible customer-generator that
is their customer for each service area of an electric corporation,
local publicly owned electric utility, or electrical cooperative, in
which the eligible customer-generator has net energy metering.
(C) The ratemaking authority shall develop a process for making
the information required by this paragraph available to electric
utilities, and for using that information to determine when, pursuant
to paragraphs (1) and (4), an electric utility is not obligated to
provide net energy metering to additional eligible
customer-generators in its service area.
(4) An electric utility is not obligated to provide net energy
metering to additional eligible customer-generators in its service
area when the combined total peak demand of all electricity used by
eligible customer-generators served by all the electric utilities in
that service area furnishing net energy metering to eligible
customer-generators exceeds 5 percent of the aggregate customer peak
demand of those electric utilities.
(5) By January 1, 2010, the commission, in consultation with the
Energy Commission, shall submit a report to the Governor and the
Legislature on the costs and benefits of net energy metering, wind
energy co-metering, and co-energy metering to participating customers
and nonparticipating customers and with options to replace the
economic costs and benefits of net energy metering, wind energy
co-metering, and co-energy metering with a mechanism that more
equitably balances the interests of participating and
nonparticipating customers, and that incorporates the findings of the
report on economic and environmental costs and benefits of net
metering required by subdivision (n).
(d) Every electric utility shall make all necessary forms and
contracts for net energy metering and net surplus electricity
compensation service available for download from the Internet.
(e) (1) Every electric utility shall ensure that requests for
establishment of net energy metering and net surplus electricity
compensation are processed in a time period not exceeding that for
similarly situated customers requesting new electric service, but not
to exceed 30 working days from the date it receives a completed
application form for net energy metering service or net surplus
electricity compensation, including a signed interconnection
agreement from an eligible customer-generator and the electric
inspection clearance from the governmental authority having
jurisdiction.
(2) Every electric utility shall ensure that requests for an
interconnection agreement from an eligible customer-generator are
processed in a time period not to exceed 30 working days from the
date it receives a completed application form from the eligible
customer-generator for an interconnection agreement.
(3) If an electric utility is unable to process a request within
the allowable timeframe pursuant to paragraph (1) or (2), it shall
notify the eligible customer-generator and the ratemaking authority
of the reason for its inability to process the request and the
expected completion date.
(f) (1) If a customer participates in direct transactions pursuant
to paragraph (1) of subdivision (b) of Section 365 with an electric
service provider that does not provide distribution service for the
direct transactions, the electric utility that provides distribution
service for the eligible customer-generator is not obligated to
provide net energy metering or net surplus electricity compensation
to the customer.
(2) If a customer participates in direct transactions pursuant to
paragraph (1) of subdivision (b) of Section 365 with an electric
service provider, and the customer is an eligible customer-generator,
the electric utility that provides distribution service for the
direct transactions may recover from the customer's electric service
provider the incremental costs of metering and billing service
related to net energy metering and net surplus electricity
compensation in an amount set by the ratemaking authority.
(g) Except for the time-variant kilowatthour pricing portion of
any tariff adopted by the commission pursuant to paragraph (4) of
subdivision (a) of Section 2851, each net energy metering contract or
tariff shall be identical, with respect to rate structure, all
retail rate components, and any monthly charges, to the contract or
tariff to which the same customer would be assigned if the customer
did not use an eligible solar or wind electrical generating facility,
except that eligible customer-generators shall not be assessed
standby charges on the electrical generating capacity or the
kilowatthour production of an eligible solar or wind electrical
generating facility. The charges for all retail rate components for
eligible customer-generators shall be based exclusively on the
customer-generator's net kilowatthour consumption over a 12-month
period, without regard to the eligible customer-generator's choice as
to from whom it purchases electricity that is not self-generated.
Any new or additional demand charge, standby charge, customer charge,
minimum monthly charge, interconnection charge, or any other charge
that would increase an eligible customer-generator's costs beyond
those of other customers who are not eligible customer-generators in
the rate class to which the eligible customer-generator would
otherwise be assigned if the customer did not own, lease, rent, or
otherwise operate an eligible solar or wind electrical generating
facility is contrary to the intent of this section, and shall not
form a part of net energy metering contracts or tariffs.
(h) For eligible customer-generators, the net energy metering
calculation shall be made by measuring the difference between the
electricity supplied to the eligible customer-generator and the
electricity generated by the eligible customer-generator and fed back
to the electric grid over a 12-month period. The following rules
shall apply to the annualized net metering calculation:
(1) The eligible residential or small commercial
customer-generator shall, at the end of each 12-month period
following the date of final interconnection of the eligible
customer-generator's system with an electric utility, and at each
anniversary date thereafter, be billed for electricity used during
that 12-month period. The electric utility shall determine if the
eligible residential or small commercial customer-generator was a net
consumer or a net surplus customer-generator during that period.
(2) At the end of each 12-month period, where the electricity
supplied during the period by the electric utility exceeds the
electricity generated by the eligible residential or small commercial
customer-generator during that same period, the eligible residential
or small commercial customer-generator is a net electricity consumer
and the electric utility shall be owed compensation for the eligible
customer-generator's net kilowatthour consumption over that 12-month
period. The compensation owed for the eligible residential or small
commercial customer-generator's consumption shall be calculated as
follows:
(A) For all eligible customer-generators taking service under
contracts or tariffs employing "baseline" and "over baseline" rates,
any net monthly consumption of electricity shall be calculated
according to the terms of the contract or tariff to which the same
customer would be assigned to, or be eligible for, if the customer
was not an eligible customer-generator. If those same
customer-generators are net generators over a billing period, the net
kilowatthours generated shall be valued at the same price per
kilowatthour as the electric utility would charge for the baseline
quantity of electricity during that billing period, and if the number
of kilowatthours generated exceeds the baseline quantity, the excess
shall be valued at the same price per kilowatthour as the electric
utility would charge for electricity over the baseline quantity
during that billing period.
(B) For all eligible customer-generators taking service under
contracts or tariffs employing time-of-use rates, any net monthly
consumption of electricity shall be calculated according to the terms
of the contract or tariff to which the same customer would be
assigned, or be eligible for, if the customer was not an eligible
customer-generator. When those same customer-generators are net
generators during any discrete time-of-use period, the net
kilowatthours produced shall be valued at the same price per
kilowatthour as the electric utility would charge for retail
kilowatthour sales during that same time-of-use period. If the
eligible customer-generator's time-of-use electrical meter is unable
to measure the flow of electricity in two directions, paragraph (1)
of subdivision (c) shall apply.
(C) For all eligible residential and small commercial
customer-generators and for each billing period, the net balance of
moneys owed to the electric utility for net consumption of
electricity or credits owed to the eligible customer-generator for
net generation of electricity shall be carried forward as a monetary
value until the end of each 12-month period. For all eligible
commercial, industrial, and agricultural customer-generators, the net
balance of moneys owed shall be paid in accordance with the electric
utility's normal billing cycle, except that if the eligible
commercial, industrial, or agricultural customer-generator is a net
electricity producer over a normal billing cycle, any excess
kilowatthours generated during the billing cycle shall be carried
over to the following billing period as a monetary value, calculated
according to the procedures set forth in this section, and appear as
a credit on the eligible commercial, industrial, or agricultural
customer-generator's account, until the end of the annual period when
paragraph (3) shall apply.
(3) At the end of each 12-month period, where the electricity
generated by the eligible customer-generator during the 12-month
period exceeds the electricity supplied by the electric utility
during that same period, the eligible customer-generator is a net
surplus customer-generator and the electric utility shall, upon an
affirmative election by the eligible customer-generator, either (A)
provide net surplus electricity compensation for any net surplus
electricity generated during the prior 12-month period, or (B) allow
the eligible customer-generator to apply the net surplus electricity
as a credit for kilowatthours subsequently supplied by the electric
utility to the surplus customer-generator. For an eligible
customer-generator that does not affirmatively elect to receive
service pursuant to net surplus electricity compensation, the
electric utility shall retain any excess kilowatthours generated
during the prior 12-month period. The eligible customer-generator not
affirmatively electing to receive service pursuant to net surplus
electricity compensation shall not be owed any compensation for the
net surplus electricity unless the electric utility enters into a
purchase agreement with the eligible customer-generator for those
excess kilowatthours. Every electric utility shall, by January 31,
2010, provide notice to eligible customer-generators that they are
eligible to receive net surplus electricity compensation for net
surplus electricity, that they must elect to receive net surplus
electricity compensation, and that the 12-month period commences when
the electric utility receives the eligible customer-generator's
election. The commission may, for an electric utility that is an
electrical corporation or electrical cooperative, adopt requirements
for providing notice and the manner by which eligible
customer-generators may elect to receive net surplus electricity
compensation.
(4) (A) The ratemaking authority shall, by January 1, 2011,
establish a net surplus electricity compensation valuation to
compensate the net surplus customer-generator for the value of net
surplus electricity generated by the net surplus customer-generator.
The commission shall establish the valuation in a ratemaking
proceeding. The ratemaking authority for a local publicly owned
electric utility shall establish the valuation in a public
proceeding. The net surplus electricity compensation valuation shall
be established so as to provide the net surplus customer-generator
just and reasonable compensation for the value of net surplus
electricity, while leaving other ratepayers unaffected. The
ratemaking authority shall determine whether the compensation will
include, where appropriate justification exists, either or both of
the following components:
(i) The value of the electricity itself.
(ii) The value of the renewable attributes of the electricity.
(B) In establishing the rate pursuant to subparagraph (A), the
ratemaking authority shall ensure that the rate does not result in a
shifting of costs between solar customer-generators and other bundled
service customers.
(5) (A) Upon adoption of the net surplus electricity compensation
rate by the ratemaking authority, any renewable energy credit, as
defined in Section 399.12, for net surplus electricity purchased by
the electric utility shall belong to the electric utility. Any
renewable energy credit associated with electricity generated by the
eligible customer-generator that is utilized by the eligible
customer-generator shall remain the property of the eligible
customer-generator.
(B) Upon adoption of the net surplus electricity compensation rate
by the ratemaking authority, the net surplus electricity purchased
by the electric utility shall count toward the electric utility's
renewables portfolio standard annual procurement targets for the
purposes of paragraph (1) of subdivision (b) of Section 399.15, or
for a local publicly owned electric utility, the renewables portfolio
standard annual procurement targets established pursuant to Section
387.
(6) The electric utility shall provide every eligible residential
or small commercial customer-generator with net electricity
consumption and net surplus electricity generation information with
each regular bill. That information shall include the current
monetary balance owed the electric utility for net electricity
consumed, or the net surplus electricity generated, since the last
12-month period ended. Notwithstanding this subdivision, an electric
utility shall permit that customer to pay monthly for net energy
consumed.
(7) If an eligible residential or small commercial
customer-generator terminates the customer relationship with the
electric utility, the electric utility shall reconcile the eligible
customer-generator's consumption and production of electricity during
any part of a 12-month period following the last reconciliation,
according to the requirements set forth in this subdivision, except
that those requirements shall apply only to the months since the most
recent 12-month bill.
(8) If an electric service provider or electric utility providing
net energy metering to a residential or small commercial
customer-generator ceases providing that electric service to that
customer during any 12-month period, and the customer-generator
enters into a new net energy metering contract or tariff with a new
electric service provider or electric utility, the 12-month period,
with respect to that new electric service provider or electric
utility, shall commence on the date on which the new electric service
provider or electric utility first supplies electric service to the
customer-generator.
(i) Notwithstanding any other provisions of this section, the
following provisions shall apply to an eligible customer-generator
with a capacity of more than 10 kilowatts, but not exceeding one
megawatt, that receives electric service from a local publicly owned
electric utility that has elected to utilize a co-energy metering
program unless the local publicly owned electric utility chooses to
provide service for eligible customer-generators with a capacity of
more than 10 kilowatts in accordance with subdivisions (g) and (h):
(1) The eligible customer-generator shall be required to utilize a
meter, or multiple meters, capable of separately measuring
electricity flow in both directions. All meters shall provide
time-of-use measurements of electricity flow, and the customer shall
take service on a time-of-use rate schedule. If the existing meter of
the eligible customer-generator is not a time-of-use meter or is not
capable of measuring total flow of energy in both directions, the
eligible customer-generator shall be responsible for all expenses
involved in purchasing and installing a meter that is both
time-of-use and able to measure total electricity flow in both
directions. This subdivision shall not restrict the ability of an
eligible customer-generator to utilize any economic incentives
provided by a governmental agency or an electric utility to reduce
its costs for purchasing and installing a time-of-use meter.
(2) The consumption of electricity from the local publicly owned
electric utility shall result in a cost to the eligible
customer-generator to be priced in accordance with the standard rate
charged to the eligible customer-generator in accordance with the
rate structure to which the customer would be assigned if the
customer did not use an eligible solar or wind electrical generating
facility. The generation of electricity provided to the local
publicly owned electric utility shall result in a credit to the
eligible customer-generator and shall be priced in accordance with
the generation component, established under the applicable structure
to which the customer would be assigned if the customer did not use
an eligible solar or wind electrical generating facility.
(3) All costs and credits shall be shown on the eligible
customer-generator's bill for each billing period. In any months in
which the eligible customer-generator has been a net consumer of
electricity calculated on the basis of value determined pursuant to
paragraph (2), the customer-generator shall owe to the local publicly
owned electric utility the balance of electricity costs and credits
during that billing period. In any billing period in which the
eligible customer-generator has been a net producer of electricity
calculated on the basis of value determined pursuant to paragraph
(2), the local publicly owned electric utility shall owe to the
eligible customer-generator the balance of electricity costs and
credits during that billing period. Any net credit to the eligible
customer-generator of electricity costs may be carried forward to
subsequent billing periods, provided that a local publicly owned
electric utility may choose to carry the credit over as a
kilowatthour credit consistent with the provisions of any applicable
contract or tariff, including any differences attributable to the
time of generation of the electricity. At the end of each 12-month
period, the local publicly owned electric utility may reduce any net
credit due to the eligible customer-generator to zero.
(j) A solar or wind turbine electrical generating system, or a
hybrid system of both, used by an eligible customer-generator shall
meet all applicable safety and performance standards established by
the National Electrical Code, the Institute of Electrical and
Electronics Engineers, and accredited testing laboratories, including
Underwriters Laboratories and, where applicable, rules of the
commission regarding safety and reliability. A customer-
generator whose solar or wind
turbine electrical generating system, or a hybrid system of both,
meets those standards and rules shall not be required to install
additional controls, perform or pay for additional tests, or purchase
additional liability insurance.
(k) If the commission determines that there are cost or revenue
obligations for an electrical corporation, as defined in Section 218,
that may not be recovered from customer-generators acting pursuant
to this section, those obligations shall remain within the customer
class from which any shortfall occurred and may not be shifted to any
other customer class. Net energy metering and co-energy metering
customers shall not be exempt from the public goods charges imposed
pursuant to Article 7 (commencing with Section 381), Article 8
(commencing with Section 385), or Article 15 (commencing with Section
399) of Chapter 2.3 of Part 1. In its report to the Legislature, the
commission shall examine different methods to ensure that the public
goods charges remain nonbypassable.
( l ) A net energy metering, co-energy metering, or
wind energy co-metering customer shall reimburse the Department of
Water Resources for all charges that would otherwise be imposed on
the customer by the commission to recover bond-related costs pursuant
to an agreement between the commission and the Department of Water
Resources pursuant to Section 80110 of the Water Code, as well as the
costs of the department equal to the share of the department's
estimated net unavoidable power purchase contract costs attributable
to the customer. The commission shall incorporate the determination
into an existing proceeding before the commission, and shall ensure
that the charges are nonbypassable. Until the commission has made a
determination regarding the nonbypassable charges, net energy
metering, co-energy metering, and wind energy co-metering shall
continue under the same rules, procedures, terms, and conditions as
were applicable on December 31, 2002.
(m) In implementing the requirements of subdivisions (k) and (
l ), an eligible customer-generator shall not be required
to replace its existing meter except as set forth in paragraph (1) of
subdivision (c), nor shall the electric utility require additional
measurement of usage beyond that which is necessary for customers in
the same rate class as the eligible customer-generator.
(n) It is the intent of the Legislature that the Treasurer
incorporate net energy metering, including net surplus electricity
compensation, co-energy metering, and wind energy co-metering
projects undertaken pursuant to this section as sustainable building
methods or distributive energy technologies for purposes of
evaluating low-income housing projects.
